TV Writers Authorize Strike Over Pay, Benefits in Streaming Era

(Bloomberg) -- Hollywood writers seeking higher pay and benefit protection authorized a strike against the major networks and studios, setting the stage for a walkout like the one that cost more than $2 billion almost a decade ago.

Negotiators are scheduled to resume negotiations Tuesday in a last-ditch attempt to avert a work stoppage. The current agreement expires on May 1, according to the Alliance of Motion Picture & Television Producers, or AMPTP, management’s bargaining unit. Members of the Writers Guild of America authorized the work stoppage in voting that concluded Monday.

While TV production has soared with the advent of streaming and money pouring into original cable shows, writers say the changes leave them with less, not more. Shorter seasons -- 13 or so episodes compared with 20 or more routinely in the past -- mean less money if writers are bound exclusively to a program. Residual pay -- from reruns and international sales -- hasn’t kept up with the advent of web viewing, they say.

The TV industry produced a record 455 scripted shows last year, more than double the number of programs that were made in 2009, according to FX, a cable outlet owned by 21st Century Fox Inc. In just five years, Netflix Inc. has become one of the biggest financiers of original programming in the world, and Inc. isn’t far behind.

The dispute is occurring as the networks prepare to unveil new and returning programs to advertisers and the news media next month, an annual ritual known as the upfronts. Broadcasters like CBS, Fox, Comcast Corp.’s NBC and Walt Disney Co.’s ABC use those presentations to lock down sponsorships for the 2017-18 TV season that starts in September.

If the writers walk out, programmers including cable outlets like Comcast’s USA and Time Warner Inc.’s TNT could be unveiling shows that won’t be ready in time. The 100-day strike in 2007-08 cost the industry more than $2 billion, according to Milken Institute estimates.

Media giants including Time Warner and Walt Disney Co. are represented by the AMPTP. The group has proposed a few solutions, including exempting writers from exclusive commitments to a given show, according to people familiar with the plans who asked not to be identified discussing private negotiations. That would let writers line up a few jobs in the same year and earn more.

“The companies are committed to reaching a deal at the bargaining table that keeps the industry working,” the AMPTP said in an emailed statement Monday.

The producers have said the guild is making too many demands and must prioritize its members’ requests. Prior to the negotiations, the guild had indicated the future of its health-care insurance was the gravest concern.

The coverage, called the Rolls Royce of plans by many in the industry, is on shaky financial ground. The producers’ alliance has offered to provide more money if the guild agrees to cost-saving concessions, according to the people. The guild said the proposed cuts go too deep.